Altice International, a telecommunications group founded by billionaire Patrick Drahi, is embroiled in a debt dispute with its creditors, who are pushing for priority after the company moved significant assets out of their reach. A group of creditors holding approximately €8 billion in debt, including London-based credit funds Sona Asset Management and Arini Capital Management, along with King Street Capital Management, sent a formal default notice to Altice International. They allege that the company defaulted on over €2 billion in borrowings and violated debt covenants by extending €5 billion in inter-company loans and shifting assets.
At the core of the dispute is a "drop-down" transaction where Altice International reclassified its Portuguese and Dominican Republic operations as "unrestricted subsidiaries." These two businesses represent a substantial portion of the company's value, accounting for roughly 80 percent of its earnings (Adjusted EBITDA) and 75% of revenues in the last twelve months to September 30, 2025. These assets had previously been pledged as collateral until the end of 2025. This move effectively removes them from the pool of assets securing the creditors' debt.
Following this announcement, Altice International's bond prices plummeted. Senior secured bonds dropped between six and eight points to the mid-60s, while its 2027 notes were quoted at 74.5. Subordinated bonds fell by more than 16 points to an indicated 18. This aggressive maneuver is seen by analysts as an attempt by Altice to strengthen its bargaining position ahead of debt talks, similar to strategies observed with Altice France. Creditors argue that under the debt contract, Altice should have offered to repay outstanding debt once "substantially all assets" were removed from their reach.
Secured creditors, advised by Gibson Dunn and Houlihan Lokey, have formed a steering committee comprising 11 funds, including Sona Asset Management, PGIM, Invesco, BlackRock, King Street Capital Management, Arini Capital Management, RBC BlueBay Asset Management, and Fidelity Investments. Around 87% of senior secured creditors have signed a co-operation agreement. Separately, junior creditors, including GoldenTree Asset Management and CastleKnight Management LP, have hired Jefferies Financial Group Inc. and Milbank LLP as their advisers. The creditors' default notice signals their readiness to pursue contractual and legal remedies as Altice International has reportedly been reluctant to engage in negotiations regarding upcoming debt maturities.
Altice International's pro forma net leverage multiple stands at 5.7x, based on over €8.6 billion in net debt, with approximately €3 billion maturing in 2027. Pro forma third-quarter EBITDA, excluding Portugal and the Dominican Republic, showed an 8.7% slump to €78 million from €85 million in the third quarter of 2024, despite an 8.2% rise in revenues to €266 million. The company announced a strategic review of its asset portfolio and indicated the possibility of selling some assets, with potential valuations for Altice Portugal at around 7x EBITDA, the Dominican Republic at 4.5x, and Israel's mobile business at 6.5-7x EBITDA.
